Thursday Watch

Late-Night Headlines
Bloomberg:
- Companies in the S&P 500 may still be a bargain after the benchmark for US equities surpassed its 2000 record. The index's 500 members are 45% less expensive relative to historical profits than when the index last peaked.
- China’s stocks fell, extending a slide that wiped out $161 billion of the market value yesterday after the tax on securities trades was tripled. About 15 of the CSI 300 Index’s members fell by the 10% daily limit.
- Thomas H. Lee Partners LP and Fidelity National Financial agreed to buy Ceridian Corp.(CEN) for $5.3 billion after shareholders pressed the company for changes.
- Fred Thompson, a star of NBC’s “Law & Order” since 2002, told the show’s producer Dick Wolf that he won’t return for the new season in September, the latest sign that he may run for president next year.
- Japan’s wages unexpectedly fell in April, a fifth month of declines that may hamper a recovery in consumer spending.
- A California appeals court refused to throw out a suit accusing Gradient Analytics Inc., a research firm, and Rocker Partners LLC, a hedge fund, of driving down the price of Overstock.com Inc.(OSTK) shares.
- Daily average US ethanol production increased 1,000 barrels a day in March over February and the increased output is likely to spur discretionary blending.
- David Humphreys, chief economist of OAO GMK Norilsk Nickel, the word’s biggest nickel producer, said China’s production of nickel pig iron is a “significant” addition to global supplies and the market is moving into surplus.
- Peru’s main stock index fell the most in 12 years today, plunging 7.6%, led by miner Sociedad Minera Cerro Verde SA, on concern that Chinese demand for commodities may slow.

Financial Times:
- Man Group Plc is poised to start a “true” NY-listed hedge fund. The listing, which would be underwritten by Morgan Stanley(MS), may raise several hundred million dollars.
- Postnuptial agreements are gaining popularity among wealthy hedge fund managers and executives who want to safeguard their fortunes in case of divorce.
- Google(GOOG) will announce an initiative on Thursday that will take its applications beyond the web and challenge Microsoft(MSFT) on its home turf of the computer hard-drive.

Korea Economic Daily:
- An oil field OAO Rosneft is developing with South Korean companies may hold 10 billion barrels of oil, almost 300% more than initial estimates, citing South Korean government officials.

Commercial Times:
- Taiwan retail investors have stepped up buying of US dollars as the local currency gained following attempts by the island’s central bank to shore up its value. Taiwan banks have had 20 or 30 percent more than usual retail customers in the past few days wanting to exchange local dollars into the US currency.

21^st Century Business Herald:
- China is to start a tracking system in June to crack down on stock market speculation by state-owned enterprises, citing an official at the nation’s state assets agency. The nation’s state assets supervisor will also step up crackdowns on insider trading and share price manipulation, starting next month.

Xinhua News Agency:
- Eastmoney.com, a Chinese Web site that provides financial news and information, may raise $500 million in an IPO on the Nasdaq Stock Exchange.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (ADBE), target $50.

Night Trading
Asian Indices are +1.0% to +1.50% on average.
S&P 500 indicated +01%.
NASDAQ 100 indicated +.09%.

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In Play
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Conference Calendar
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Macro Calls
Rasmussen Business & Economy Polling
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Earnings of Note
Company/EPS Estimate
- (ATVI)/-.03
- (BIG)/.19
- (BTH)/.19
- (BRCD)/.09
- (CIEN)/.25
- (CSC)/1.48
- (CPRT)/.41
- (COST)/.56
- (DELL)/.27
- (DG)/.08
- (ESL)/.64
- (FOSL)/.30
- (FRED)/.19
- (GCO)/.26
- (HNZ)/.56
- (IRF)/.58
- (JCG)/.29
- (JTX)/1.94
- (OVTI)/-.01
- (PLL)/.43
- (NX)/.76
- (SHLD)/1.21
- (TIF)/.35

Upcoming Splits
- (GEO) 2-for-1

Economic Releases
8:30 am EST
- Preliminary 1Q GDP is estimated to rise .8% versus a prior estimate of a 1.3% gain.
- Preliminary 1Q Personal Consumption is estimated to rise 4.1% versus a prior estimate of a 3.8% gain.
- Preliminary 1Q GDP Price Index is estimated to rise 4.0% versus a prior estimate of a 4.0% gain.
- Preliminary 1Q Core PCE is estimated to rise 2.2% versus a prior estimate of a 2.2% gain.
- Initial Jobless Claims are estimated to rise to 314K versus 311K the prior week.
- Continuing Claims are estimated to fall to 2500K versus 2529K prior.

9:45 am EST
- Chicago Purchasing Manager for May is estimated to rise to 54.0 versus 52.9 in April.

10:00 am EST
- Construction Spending for April is estimated to remain unch. versus a .2% rise in March.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 1,000,000 barrels versus a 1,969,000 barrel increase the prior week. Gasoline supplies are expected to rise by 1,500,000 barrels versus a 1,431,000 barrel increase the prior week. Distillate inventories are estimated to rise by 700,000 barrels versus a 512,000 barrel increase the prior week. Refinery Utilization is estimated to rise .50% versus a 1.60% increase the prior week. Finally, Natural Gas supplies are expected to rise by 105 bcf versus a 104 bcf increase the prior week.

Other Potential Market Movers
- The (HNZ) analyst day, (NVLS) 2Q mid-quarter update, (MA) Investment Community Day, (AIG) Financial Services Presentation, FBR Growth Conference, Bank of American Healthcare Conference, Deutsche Bank Energy/Utilities Conference, Sanford Bernstein Strategic Decisions Conference, Cowen Tech Conference and Lehman Wireless/Wireline Conference could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology stocks in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.